Handbook Smart City Business Model Innovation

Release date

Wed, 02/06/2019 - 12:00

This handbook on Smart City Business Model Innovation seeks to outline the underlying success factors for business model innovation in Smart Cities.Read more

This handbook on Smart City Business Model Innovation seeks to outline the underlying success factors for business model innovation in Smart Cities. In a systematic manner the LHCs and FCs of the project SMARTER TOGETHER have been investigated in terms of their approach to business model development, innovation, commercialization and replication. By doing so, external and internal success factors have been identified, which are illustrated in a systematic manner based on the business model logic developed by Gassmann et al. (2014). This logic defines four key components of a business model where the value target (Who) and the value proposition (What) are related to an organization’s internal capabilities. The means for capturing (Why) and creating value (How) are related to external factors such as resources and stakeholders. To enrich the in-depth analysis of these four key components with more hands-on examples, use cases from the LHCs as well as viable business model solutions from private companies in the smart city domain were collected. The aim of the use cases is to demonstrate solutions from SMARTER TOGETHER and to add some new insights from business models generated outside the project as well.

Key findings suggest that the cities have developed a rich portfolio of different approaches in the focus domains refurbishment, mobility and smart data platform. Some solutions differ fundamentally between the LHCs which can be attributed to diverging legal frameworks and cultural norms. However, all the cities have shown a high level of innovativeness in engaging with their citizens. From these citizen engagement activities many innovative business models have been co-created of which some are demonstrated in this handbook. The LHCs and FCs have further accumulated comprehensive experience and knowledge during SMARTER TOGETHER. Hence, this handbook seeks to contribute to extracting this often implicit knowledge and capturing it in an easy to understand fashion. However, the business models developed since the project’s initiation in 2016 are still in a development and testing phase. While some are more mature, it seems as if the cities have struggled more in some domains, e.g. smart data platforms, to come up with viable business model solutions. A key concern for all business models developed are innovative funding mechanisms. Some projects are surprisingly innovative with regards to funding, however, the majority of the LHCs seems to find it rather challenging to come up with funding ideas outside the usual.

The use cases and key findings, however, demonstrate that commercialization and replication are closely linked with customers’ needs. As these are continuously transforming, business models for smart cities need to follow these continuous changes and should be constantly iterated.